Updated: BlackBerry to pull back from consumer market, warns of huge loss and layoffs

Posted by admin on January 31st, 2015 02:03 PM

BlackBerry launched its preliminary 2nd quarter financial results today, and as jargon-y as that sounds, the business dropped some significant bombshells.

We will start with the information that impacts customers directly: BlackBerry has actually chosen to chop its future smartphone profile from 6 gadgets to four. Cost saving measures are to be expected, however there’s even more.

The phone maker will certainly now concentrate on making ‘enterprise and prosumer-centric targeted gadgets,’ producing for that space two high-end devices and two entry-level gadgets. All-touch and QWERTY designs are in the offing, but the days of BlackBerry ardently plying phones to customers are over.

‘We’re executing the difficult, but necessary functional changes announced today to resolve our position in a maturing and more competitive market, and to drive the business toward profitability,’ CEO Thorsten Heins stated in a BlackBerry press release.

‘Going ahead, we prepare to refocus our providing on our end-to-end solution of hardware, software application and services for ventures and the efficient, professional end user.’

Additionally, following this week’s announcement of the BlackBerry Z30, BlackBerry wishes to re-tier its predecessor, the disappointing Z10, making it readily available to ‘a more comprehensive, entry-level audience.’

BlackBerry stated an unique committee remains to discover strategic alternatives for the company’s future, which it’s specified consist of an all-out sale.

Money pit

Of course, BlackBerry wouldn’t just up and choose to move its focus on the enterprise and prosumer space. It would’ve to be losing bucket-loads of money. Well, it is.

According to the company’s initial estimations, it anticipates a net operating loss of approx. $950 million to $995 million for the 2nd quarter.

A huge section of that – $930 million to $960 million – is a mostly non-cash, pre-tax stock charge ‘resulting from the increasingly competitive business environment impacting BlackBerry smartphone volumes.’

That’s the nice way of stating the Z10 did not sell, and now BlackBerry is sitting on a mountain of unsold BlackBerry 10 handsets. A $72 million restructuring charge is also in there also.

Cutting even deeper to the quick, BlackBerry’s restructuring will lead to the lay off of approx. 4,500 staff members, or about 40 % of its workforce.

As for whatever positives there are, BlackBerry anticipates to draw in second quarter earnings of approx. $1.6 billion and sales of 3.7 million smartphones. Regretfully, only

It strategies to slice its operating expenditures by about 50 % by the end of the first 2015 financial quarter.

Whether there’s still a BlackBerry to report on in Q1 2015, well, that’s a whole other story.

The business is because of talk about final Q2 2014 financials on Sept. 27.